CHICAGO TAXES ITS WAY TO HIGHEST GAS PRICES

August 15, 2006

Gas prices hit a record high over the past three weeks, with Chicago leading the way.

According to the Lundberg Survey released Sunday, the national average price for self-service regular rose just over one cent to nearly $3.03 a gallon -- while the Chicago average was $3.29 a gallon, the highest average in the country.

But don't blame the oil companies for singling out Chicago, says Dave Sykuta of the Illinois Petroleum Council. The real culprit is taxes.

While only nine states and the District of Columbia allow sales taxes on gasoline at all, Illinois not only has a sales tax but it has the biggest one -- 5 percent.

Illinois is also the only state that allows local taxing bodies to pile on; that means the city of Chicago and the Regional Transportation Authority get an additional 4 percent, bringing the sales tax in Chicago to 9 percent.

Then Chicago also grabs an additional 5 cents a gallon and Cook County takes an additional 6 cents a gallon.

Add in the federal and state motor fuel taxes, which are earmarked to fund roads, and you get nearly 80 cents a gallon for taxes.

But it's the sales taxes that bring on the big hurt, according to Sykuta. Because they are a percentage, more taxes get paid as the price of gas goes up.

"We're the biggest tax collector outside of the IRS," Sykuta said of the service station industry.